Before we move too far into 2015, it is important to mention briefly an additional case from the end of 2014 that, once again, calls into question the franchisor-franchisee model. Late last year the Federal District Court for the Southern District of Virginia denied Hardee’s motion to dismiss a claim for negligence and deliberate workplace injury.
The plaintiff is the estate of a former Hardee’s employee who suffered first and second degree burns after attempting to clean a broken fryer pump. The plaintiff argued that the franchisor, Hardee’s, was (a) “in the business of operating and managing Hardee’s restaurants,” (b) that the fryer was broken for a significant amount of time, and (c) there were prior complaints about the problems associated with cleaning a broken fryer pump. Using these facts, the plaintiff alleged that Hardee’s was responsible as an employer under state workers’ compensation law. While workers’ compensation laws generally immunize an employer for workplace injuries, the plaintiff argued that an exception under the law applied because the defendants acted with deliberate intent.
Hardees argued that the plaintiff did not plead sufficient facts to show that it was an employer or that it knew of the unsafe working conditions. The court disagreed, stating that plaintiff’s allegation that Hardee’s was in the business of operating and managing Hardee’s restaurants and the long length of the broker fryer were adequate facts to survive a Motion to Dismiss the deliberate workplace injury claim. The court also refused to dismiss the negligence claim. In the court’s opinion, Hardee’s argument that it did not assert the degree of control required for liability was rebutted by plaintiff’s allegations that the franchisor provided training, supervision and inspections of the restaurant, including its equipment and cooking supplies.
Understandably, the backlash from this case has been significant with some stating that this decision “reflects the outer, absurd limits of potential franchisor liability.” Another article quotes an attorney stating “whatever the facts may be with regard to the franchisor/franchisee relationship, it is inconceivable that they extend to the franchisor’s alleged negligence with regard to a hot, dirty and broken restaurant fryer. That’s the kind of day-to-day working condition that has to be beyond a franchisor’s control.”
The case is ongoing and we will keep an eye out to see how it proceeds this year. In the meantime, the case offers a lesson regarding the necessity for a franchise system to respond to claims with sufficient and specific arguments. In the Hardee’s case, the District Court refused to address all the elements of the deliberate intent claim because it believed the defendants made only conclusory arguments. Prior experience in the school of hard knocks tells us that no arguments can be taken for granted, and all must be carefully briefed. Whether that would have helped in a case where the court seemed determined to ignore the franchise business model is an open question.